TuesdayJan 19 at 8:06am

Manage Discussion Entry

One key factor I’ve learned from this week’s readings is that prospectors, according to Bentley-Goode et al. (2019), engage more frequently in management earnings guidance, issue more press releases, and are followed by more financial analysts than defenders. This information asymmetry is a result of prospectors’ greater access to internal and external sources of disclosure (Bentley-Goode et al., 2019). Bujaki and McConomy (2010) explain that management must determine what to disclose and how to disclose it on annual reports. The management discussion and analysis (MD&A) disclosures in the annual report should assist financial statement users in assessing the quality of the company’s earnings and cash flows (Bujaki & McConomy, 2010). Stanko and Zeller (2003) indicate that while all firms use Generally Accepted Accounting Principles (GAAP), calculations can be different from the other competitors in that industry so shareholders must be careful when reviewing the reports. If the information a manager is considering disclosing would impact an investor’s decision to buy, sell, or hold company securities, the information is likely material and should be accurately included (Bujaki & McConomy, 2010). In Medtronic’s (2016) 2016 Performance Report, they’ve used the different shades of blue to highlight key information shareholders will likely want to know when deciding whether to invest in the company. The highlights are also broken down by the categories the company chose to focus on for the year, integrating the information with their strategy. As one goes through the annual report, they review the CEO Letter, and then go through the sections that were highlighted in depth. One thing missing from Medtronic’s report are photographs. Bujaki and McConomy (2010) explain that 92% of companies use pictures in their annual reports and that corporations who use pictures showing women underrepresented may have difficulty attracting and retaining female top performers. References Bentley-Goode, K.A., Omer, T.C., & Twedt, B.J. (2019). Does business strategy impact a firm’s information environment? Journal of Accounting, Auditing, & Finance, 34(4), 563-587. https://eds-a-ebscohost-com.proxy-library.ashford.edu/eds/pdfviewer/pdfviewer?vid=1&sid=a0bd7d69-c778-45fc-9587-9e3d26de33fe%40sessionmgr4008Links to an external site.

Bujaki, M., & McConomy, B. (2010). Voluntary disclosures in corporate annual reports — More than meets the eye. CMA Management, 84(3), 14–16. http://web.a.ebscohost.com.proxy-library.ashford.edu/ehost/pdfviewer/pdfviewer?vid=1&sid=ecaac95f-1576-4076-bb3a-1ae15827add0%40sessionmgr4008Links to an external site.

Medtronic. (2016). Integrated performance reportLinks to an external site. http://www.medtronic.com/content/dam/medtronic-com/us-en/corporate/documents/17267.MED.Sustainability.Report_4_FINAL%20NOV%208.pdfLinks to an external site.

Stanko, B., & Zeller, T. L (2003). Understanding corporate annual reports: A user’s guid e [PDF file]. Hoboken, N.J.: John Wiley & Sons.

2. Fiona Ambrose
TuesdayJan 19 at 2:28pm

Manage Discussion Entry

An Annual Operating Reviews is information gathered to assess a business’s entire year of financial growth or losses. Within the review, several vital factors may become of interest, such as departmental interest and budgeting, consumer’s concerns for products, pricing of the product, and Research and Development. By having an internal review the company can evaluate whether the business performs at a satisfactory level. A good discipline of conducting annual operating studies entails setting goals as part of the review process. If a company adopts the SMART criteria as part of its internal process it will help develop the business goals for the fiscal year become more effective. For instance, the five disciplines of the SMART process (specific, measurable, attainable, realistic, time-bound) help obtain an overview of what is transpiring.

Furthermore, operational reviews allow an organization to determine how well they will meet the challenges that present themselves in the future. Evaluation in a business can measure their place in the industry as a whole, compared to other companies in the market industry. Furthermore, “the company can see if things evaluate the right or wrong way and which areas need improvements (Barker, 2014)”. For example, in my Capstone Project “grow your business,” stimulation I was able to acknowledge whether the business is going in a correction direction or whether a specific area needs improvement by looking at the data on the balance sheet and income statements. The information analyzes if the business is increasing or decreasing assets or liabilities (Stanko and Zeller, 2003). By assessing these data I had to make decisions to adjust my short-term or long-term plan to suit the business needs. Throughout the entire process of operating HISCO’s, I had difficulties in maintaining the budget target and keeping all allocating funds necessary in the right department according to my business plans. It was a challenging project and the experience is a learning curve for my career. I did learn from the experience.

References

Barker, G. (2004). Opinion: A chance to measure corporate health: The operating and financial

The review will improve company reporting, but only if conditions can be met. The Financial Times. https://search.ebscohost.comLinks to an external site.

Stanko, B., & Zeller, T. L. (2003). Understanding corporate annual reports: A user’s guide.

Hoboken, N.J., John Wiley & Sons, Inc. eBook., Database: eBook Collection (EBSCOhost).